DMC Delivers its First Strong Payment of 2024

 Eligible producers enrolled in the DMC program received indemnity payments 11 out of the 12 months in 2023, receiving an average of $2.80 per cwt. per month.

Phil Plourd, president of Ever.Ag Insights, says this was a good news-bad news kind of story.

“It's good news if you had the insurance because it helped you get through a tough year,” he says.

Katie Burgess, director of risk management with Ever.Ag, encourages producers to continue to sign up for USDA’s DMC program.

“It has a strong track record of generating producer payouts when margins get squeezed,” she says.

DMC allows producers to select a margin between the milk price and average feed cost to determine at which level they receive assistance. 

The DMC program was authorized in the 2018 farm bill to offer protection to producers when the difference between the all-milk price and the average feed price falls below the producer-selected margin trigger.

“While livestock and crop producers alike have been financially impacted by catastrophic natural disaster events, dairy producers’ financial stressors have been compounded by significant market volatilities,” says FSA Administrator Zach Ducheneaux. “Dairy Margin Coverage is a key risk management tool for dairy operations to financially endure the numerous, and often unpredictable uncertainties that adversely impact market prices for milk.” 

National Milk Producers Federation (NMPF), president and CEO Gregg Doud, urges every dairy farmer to strongly consider signing up for DMC.

“DMC itself is improved from the previous farm bill, thanks to the permanent incorporation of updated production histories in the program, and recent low producer margins underscore just how critical DMC is for dairy farms of all sizes,” he says.